Europe is in crisis because it has been hijacked by neoliberalism and finance. Along the road to another Europe, visions of change, protest and alternatives have to be woven into a common framework. Finance should be prevented from destroying the economy.

THE APPEAL: ANOTHER ROAD FOR EUROPE June 28, 2012 – European Parliament, Brussels Europe is in crisis because it has been hijacked by neoliberalism and finance. In the last twenty years - with a persistent democratic deficit - the meaning of the European Union has increasingly been reduced to a narrow view of the single market and the single currency, leading to liberalisations and speculative bubbles, loss of rights and the explosion of inequalities. This is not the Europe that was imagined decades ago as a space of economic and political integration free from war. This is not the Europe that was built through economic and social progress, the extension of democracy and welfare rights. This European project is now in danger. Facing the financial crisis, European authorities and governments have acted irresponsibly; they saved private banks but refused to contain the difficulties of indebted countries using the tools of the Monetary Union; they imposed on all countries austerity policies and cuts in public budgets that will now be enshrined in European Treaties. The results are that the financial crisis has extended to more countries, the euro is in danger, a new great depression and the risk of disintegration of Europe are looming. Europe can survive only if another road is taken. Another Europe is possible. Europe has to mean social justice, environmental responsibility, democracy and peace. This is what the larger part of Europe’s culture and society yearns for. This is the way indicated by justice movements, mobilisations for dignity and against austerity policies. But it is the sort of Europe that has been ignored by dominant political forces in Europe. This other Europe is not a new superstate nor is it another intergovernmental bureaucracy. A form of democratic governance for Europe is needed if we are to address the global challenges that nation-states are not able to manage. Along the road to another Europe, visions of change, protest and alternatives have to be woven into a common framework. We propose six objectives. A smaller finance. Finance – at the root of the crisis – should be prevented from destroying the economy. The Monetary Union should be reorganised and provide a collective guarantee for the public debt of eurozone countries; the European Central Bank should become the Union’s lender of last resort. The burden of debt cannot be allowed to destroy countries in financial difficulty. All financial transactions have to be taxed, imbalances resulting from capital movements need be reduced, stricter regulations should ban the more speculative and risky financial activities, the division between commercial and investment banks has to be restored, a European public rating agency should be created. More integrated economic policies. Europe needs to move past old and new Stability Pacts, beyond policies limited to the single market and the single currency. Europe’s actions need to address imbalances in the real economy and the direction of development. Deep changes in taxation systems are needed, with a tax harmonization in Europe and a shift in taxation from labour to wealth and non-renewable resources, with new revenues to fund European spending. Public expenditure – at national and European levels – should be used to stimulate demand, defend welfare policies, extend public services. Industrial and innovation policies have to orient production and consumption towards high-skill, high-quality, sustainable activities. Eurobonds should be introduced not just to refinance public debt, but to fund the ecological conversion of Europe’s economy. More jobs and labour rights, less inequality. Labour rights and welfare are at the core of the meaning of Europe. After decades of policies that have created precarious jobs, poverty and unemployment, bringing inequality back to the levels of the 1930s, the priority for Europe is the creation of stable, high wage jobs – especially for women and youth - supporting low incomes and protecting trade union rights, collective bargaining and democracy at the workplace. Protecting the environment. Sustainability, the green economy, energy and resource efficiency are the new meaning of Europe’s growth. All policies need to take into account environmental effects, reduce climate change and the use of non-renewable resources, favouring clean, renewable energies, energy efficiency, local production, sobriety in consumption. Practising democracy. The forms of representative democracy through parties and governments – and the social dialogue among organisations representing capital and labour – are less and less able to provide answers to current problems. At European level the common decision-making process is increasingly replaced by the rule of the strongest. The crisis takes legitimacy away from EU institutions; the Commission increasingly acts as a bureaucratic support of the strongest member states, the Central Bank is unaccountable and the European Parliament does not fully use its powers and anyway is still excluded from crucial decisions on economic governance. In past decades, Europe’s citizens have taken centre stage in social mobilisations and in practices of participatory and deliberative democracy – from European Social Forums to the protests of indignados. These experiences need an institutional response. There is the need to overcome the mismatch between social change and political and institutional arrangements that are a remnant of the past. European societies need not be inward-looking. The social and political inclusion of migrants is a key test for Europe’s democracy. Closer ties can be built with the movements for democracy on the Southern shores of the Mediterranean after the downfall of authoritarian regimes. Making peace and upholding human rights. The integration of Europe has made it possible to overcome century-old conflicts, but Europe remains the site of nuclear weapons and aggressive military postures, and European countries still spend one fifth of world military expenditure: 316 billion dollars in 2010. With current budgetary problems, drastic cuts and transformation in military budgets are urgent. Europe’s peace does not result from projecting military force, but from a policy of human and common security that can contribute to peace and the protection of human rights. Europe has to open up to the new democracies of the Arab world in the same way as it opened up to Central and Eastern Europe after 1989. We propose to bring this agenda for another Europe to the European Parliament and to Europe’s institutions. This new meaning of Europe is already visible in cross-border citizens’ mobilisations, civil society networks, trade union struggles; it has now to shape Europe’s politics and policy-making. Thirty years ago, at the start of the “New Cold War” between East and West, the Appeal for European Nuclear Disarmament launched the idea of a Europe free from military blocs and argued that “we must commence to act as if a united, neutral, pacific Europe already existed”. Now, in the midst of the crisis of finance, markets and bureaucracies, we we must commence to practice an egalitarian, peaceful, green and democratic Europe.

A preliminary version of this appeal was launched by the organisers and speakers of the Florence Forum “The way out. Europe and Italy, economic crisis and democracy”, held on 9 December 2011. The text is the result of extensive discussions with European networks and individuals and groups in many European countries. The text is available in English, Italian, French, German and Spanish. You can sign the Appeal on the website www.anotherroadforeurope.org On June 28, 2012, a Forum on “Another Road for Europe” will be held at the European Parliament in Brussels. For information, support for the Appeal, and participation to the Brussels Forum: anotherroadforeurope@gmail.com - www.anotherroadforeurope.org

We are enduring the deepest crisis of capitalism since the great worldwide economic crisis of the 1930s – and European governments pour ever more oil on the fire! Some governments prevented a solidarity solution of the crisis in Europe from the start – and are responsible for its intensification. This is particularly true for the German government. In the fall of 2008, the German government blocked a substantial economic package on the European plane.

Hardly had the low point of the recession in Germany been reached in 2009 when the German government preached the necessity of a harsh austerity policy. The “debt brake” was anchored in the German basic law: a self-disempowerment of politics girded by neoliberal ideology.

The austerity measures in the different EU countries hit above all wage-earners, pensioners, unemployed and independent persons while the rich, bankers and corporations got off scot-free.

In the spring of 2010, the German government blocked assistance for Greece so Greek state indebtedness accelerated and solving this crisis became increasingly difficult and expensive. The credit-promises for Greece and other crisis countries were tied to ridiculous conditions that had to worsen the crisis. For example, lowering the Greek minimum wage did not help increase “competitiveness” since the country hardly has any internationally competitive industries. Instead lowering the minimum wage destroys the Greek internal market. As a result, tax revenues collapse and the state indebtedness climbs.

This example makes certain realities crystal clear. The present crisis policy continues the redistribution from wage-earners to owners of capital without regard for aggregate economic and social consequences. Greek wages have already fallen 20-30%. Hundreds of thousands lose their jobs. More than 10,000 schools were closed. Hospitals do not receive medicines any longer. Children go hungry. Similar developments also threaten in Portugal and other countries of Europe.

Neoliberal policy whose failure was blatant in the crisis is radicalized again.

The “fiscal pact” resolved by heads of government of the 24 states of the European Union on March 2, 2012 aims at legally codifying the neoliberal austerity policy forever. A “debt brake” according to the German model should be anchored all over Europe. Future state budget deficits should be limited to a maximum 0.5% of the gross domestic product. The “Stability- and Growth Pact” of the European Economic and Monetary Union that still allows a budget deficit of 3% of the gross domestic product has not withstood the reality of a capitalist society marked by crises. The deficit of 3% was regularly exceeded.

The “Agreement on Stability, Coordination and Control,” as the fiscal pact is called officially, is more than the result of crazy ideas of neoliberal economists and politicians out of touch with reality. Further waves of privatization, destruction of jobs, limitation of public services, social cuts and lower wages are pre-programmed across Europe. All this is to secure the profits of a small group of rich property owners. The destructive policy of nearly all the governments in the EU speeded up by the German and French governments is accepted and carried out because there are dominant capital elites in all these countries that profit when wage-earners are under greater pressure.

European crisis policy leads to an increasing undermining and devaluation of democracy. Through international pressure, governments in Greece and Italy were dismissed and replaced with governments of “technocrats” to soothe “the markets.” These governments make far reaching decisions without being legitimated by elections. An announced referendum on the austerity policy in Greece was cancelled on pressure of the dominant forces. Elections are pointless if the big parties in Portugal and Spain represent essentially the same policy. Powers or authorities are shifted from the national to the EU plane without an adequate democratic control of the activity of EU institutions like the European commission, the European Central Bank or the European Tribunal. With great worry, we see the strengthened nationalist, racist and fascist forces in different European countries.

Still the dominant policy is not without alternatives. A substantial alternative is only possible when causes of the crisis are rightly identified. The state indebtedness crisis is only one aspect of the present crisis in Europe. The contradictions of European integration (unequal development, common monetary policy without a common wage policy, tax policy and industrial policy) overlap. There is too much capital, measured by the possibilities of exploiting labor and nature.

An alternative strategy of combating crisis must include the following elements:

- No ratification of the fiscal pact

The fiscal pact represents a further de-democratization, codifies neoliberal policy and intensifies the crisis.

- Cancellation of state debts How the debts arose and who holds the government bonds must be clarified in a public debt audit. The debts of one are the assets of others. The savings and pension claims of the broad mass of the population must be ensured. However the interest- and compound interest claims of the rich, the banks, hedge funds and corporations must be annulled. - Socialization of the banks Banks that must be bailed out with public funds must be socialized. Banks that are “too big to fail” must be decartelized. - Radical redistribution of income and assets We need a financial transactions tax, a higher tax on capital gains, re-introduction of the property tax and a much stronger progression in the income tax for a stable financing of state expenditures, to build the public services, raise social security benefits, make possible socially and ecologically necessary public investments and fight global poverty. - Overcoming mass unemployment Mass unemployment, low wages and wage cuts are important reasons for declining wage rates and the genesis of surplus capital that inflates the financial sector. Stop manipulations of unemployment statistics. Mass unemployment can only be removed through a radical reduction in working hours. - Democratization of democracy Democracy must be strengthened on all planes, particularly on the European plane. Democracy must also include the realm of the economy. Democracy cannot end at the factory gates and before the banks as though a small group privately controls the production machine on which the life of humanity depends.

The “Arab Spring,” the movement of the “indignados” in Spain, the many strikes and demonstrations in Greece and the worldwide “Occupy” movement starting from the US have roused courage. It is high time to strengthen protests and camp out where European crisis policy is defined.